Phone Scams Remain on IRS 'Dirty Dozen' List of Tax Scams

Be careful out there. That's the word from the Internal Revenue Service (IRS) as the tax agency reminds taxpayers about continuing aggressive phone scams. Those phone scams are "a major threat to taxpayers" and as such, continued to hold down a top spot on the IRS "Dirty Dozen" list of tax scams for the 2018 filing season.

The Dirty Dozen is compiled annually by the IRS and lists a variety of common scams taxpayers may encounter any time during the year. However, many of these schemes peak during filing season - especially scam phone calls.

Here's how the scams typically work.

In the most common version of the scam, callers posing as IRS representatives contact taxpayers by phone, claiming that they owe money to the IRS. Taxpayers are told that they must pay the balance promptly using a pre-loaded debit card or wire transfer or be subject to punishment, including arrest, deportation or suspension of a business or driver’s license. The callers may have heavy foreign accents, use common names and fake badge numbers. The number on the caller ID may also look like the IRS since the scammers may spoof the IRS toll-free number.

In another version of the scam, callers posing as IRS representatives advise potential victims that two certified letters were sent to the taxpayer in the mail but were returned as undeliverable. The callers then threaten to arrest the potential victim if a payment is not immediately made through a prepaid debit card. The scammer also tells the victim that the purchase of the card is linked to the Electronic Federal Tax Payment System (EFTPS) system. To ensure that the potential victim doesn't back out, the caller warns the taxpayer not to contact their tax preparer, an attorney or their local IRS office until after the tax payment is made.

In the most recent version of the scam, thieves use phishing and other schemes to steal client data from tax professionals. Then, using that data, they file fraudulent tax returns and use the taxpayers' real bank accounts to deposit erroneous tax refunds. Finally, the thieves, posing as IRS representatives, debt collection agency officials, or law enforcement, call attention to the error and ask taxpayers to return the money to them.

The Treasury Inspector General for Tax Administration (TIGTA) reports they have become aware of over 12,716 victims who have collectively paid over $63 million as a result of phone scams since October 2013.

As a reminder, the IRS will never:

Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.

Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.

Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.

Require you to use a specific payment method for your taxes, such as a prepaid debit card, gift card or wire transfer.

Ask for credit or debit card numbers over the phone.

Don't engage or respond with scammers. Here's what to do if you receive a suspicious phone call or message:

If you receive a call from someone claiming to be from the IRS, and you do not owe tax, or if you are immediately aware that it's a scam, don't engage with the scammer and do not give out any information. Just hang up.

If you receive a telephone message from someone claiming to be from the IRS, and you do not owe tax, or if you are immediately aware that it's a scam, don't call them back.

If you receive a phone call from someone claiming to be with the IRS, and you owe tax or think you may owe tax, do not give out any information. Call the IRS back at 1.800.829.1040 to find out more information.

You can also contact Treasury Inspector General for Tax Administration (TIGTA) to report scam calls by calling 1.800.366.4484 or by using the “IRS Impersonation Scam Reporting” form on their website. You may also want to report the scam to the Federal Trade Commission (FTC) by using the “FTC Complaint Assistant” to report persons pretending to be from the government; please add “IRS Telephone Scam” in the notes.